INTRDUCTION OF THE ORGANIZARION

Name of Unit:

KAIRA DISTRICT CO-OPERATIVE MILK PRODUCERS UNION

LTD. (AMUL).
Anand-388001
Gujarat, India.

Location :

Kaira District Co-operative Milk Producers' Union Ltd

Amul Dairy Road
Anand. 388 001.

Phone:

+91 02692 256124

+91 02692 256225

Nature of the company:

By nature the company is registered as Co-Operative Union Ltd. Sector

and under a Co-Operative Societies act,14th December 1946.

Slogan/Punch line:

THE TASTE OF INDIA

Website:

www.amul.com
www.amuldairy.org

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 LOGO OF THE AMUL

Logo of AMUL is a ring of four hands, which are co-coordinated each

other. The actual meaning of this symbol is co-ordination of hand of
different people by whom this union is now at top.

FIRST HAND: Is for farmers (producers), without whom the organization

would not be existed. Farmers are the inspiration of the AMUL-taste of
India.

SECOND HAND: Is for the representatives of processors by whom the raw

milk processed in to different finished products.

THIRD HAND: Is for marketers without whom the products would not
been able to reach to the customers.

FOURTH HAND: Is for customers without whom the organization could

not carry on because they are the people who consume the products.

2
 NATURE

The name Amul itself indicates that it is a co-operative union. There are
various types of co-operative society which are as under:

(1) Producers or manufactures co-operative society

(2) Consumer co-operative society
(3) Housing co-operative society
(4) co-operative farming
(5) co-operative credit solvency

This firm is the firm of association in which person combine together to

form a society for the purpose of manufacturing goods. Although it is
democratic management of industrial production. This is useful where large
capital is neither necessary nor much technical and expert knowledge of the
management is needed. In India some of the Sugar mill and ginning mills are
running under this formation. Dairies are also adopting co-operating format.
Amul is the producers' co-operative society.

COMPETITORS

Competitors are the person who produce and sales the same product as
produced by the unit. Competitors affect the business with several causes.
The main rivals of AMUL are as following

Rich Milk
Sardar milk
Nestle
Britannia
Cheese of Le-Beon
Gowardhan

3
ORGANIZATION STRUCTURE
B.O.D

Chairman

Vice Chairman

Managing Director

General Manager (Dairy Plant & Technology)

Assistant General Manager

Manager

Deputy Manager

Assistant Manager

Superintendent

Deputy Superintendent

Senior Officer

Assistant

Junior Assistant

4
 Workers

GOALS & OBJECTIVES OF AMUL

The main objectives of the co-operative society are as follows:

It is voluntary organization. A member can continue this membership

as long as he or she desire and can by giving a notice withdraw his or
her capital and ceased to be a member.

There is no limit to its membership face value of one share is

generally kept between Rs 1 and Rs 10. Thus small value of share
makes it possible to enroll a large number of persons because even a
poor man can affected by this much amount.

Its object is to serve the members and to earn the profit.

5
OBJECTIVE OF THE REPORT

(1) To measure the short term solvency of the enterprise.

(2) To measure the long term solvency of the enterprise.

(3) To measure the enterprises operating efficiency and profitability.

(4) To compare intra firm position and pattern position with an industry.

PURPOSE OF THE REPORT

(1) To identify the magnitude & direction of changes in enterprises

financial & performance.

(2) To ascertain the strength & weakness of the enterprise on terms of

liquidity, profitability & solvency.

6
PLANTS LOCATION

ANAND PLANT:

Anand plant is the main plant. Most of the raw material received here.
Products being manufactured here which are,
Butter, Flavored milk, Ghee, Milk Powder, Baby foods, Cheese etc.

MOGAR PLANT:

It is situated on Anand Vadodara National Highway No. 8. It produces

chocolates, Nutramul, Amullite, Amul Ganthia. This plant was established in
1973.

KHATRAJ PLANT:

It is situated between Nadiad Mahemdabad. It produces the Cheese.

This plant also produces paneer.

PUNE & KOLKATA:

In Pune and Kolkata no production is done. Only milk collection and

milk marketing activities are performed.

CHILLING CENTRE:

Kapadwanj, Balasinor, Undel, Khembe there are 120 chilling units in

socities.

7
BANKERS OF AMUL

(1) Kaira district Central Co-operative Bank Limited

(2) State Bank of India

(3) Bank of Baroda

(4) Bank of Maharashtra

(5) HDFC Bank Limited

(6) Corporation Bank

(7) Axis Bank

8
 RATIO ANALYSIS

The most important task of a financial manager is to interpret the

financial information in such a manner, that it can be well understood by the
people, who are not well versed in financial information figures. The technique,
by which it is to be calculated, is known as Ratio Analysis.
1) Percentage 2) Rate 3) Proportion
Ratio Analysis is an important technique of financial analysis. It depicts
the efficiency or shortfall of the organization in the form of trend Analysis.
Different ratio appeal to different people managements, having the task
of running business efficiency, will interest in all ratios.
A Supplier of goods on credit will be partially interested in liquidity
ratios, which indicate the ability of the business to pay its bills.
Existing and future shareholders will indicate the ability of business to
purchase.
Existing and future shareholders will interest in investment ratios, which
indicate the level of return that can be expected on an investment in business.
Major customers, intent on having a continuing source of supply, will be
interested in the financial stability, as reveled by the capital structure, liquidity
and profitability ratios.
Debenture and loan stock holders will be interested in ability of a
business will be interested in the ability of a business to pay interest, and
ultimately to repay capital.
A banker, gibing only short-term loans, will be interested mainly in the
liquidity of the business, and its ability to repay those loans.

9
STEPS IN RATIO ANALYSIS
Collection of information, which are relevant from the financial
statements and then to calculate different ratios accordingly.
Comparison of computed ratios of the same organization or with the
industry ratios.
Interpretation, drawing of the inference and report-writing.

RATIO ANALYSIS
Ratio analyses are a powerful tool of financial analysis. A ratio is
defined as the indicated quotient of two mathematical expressions and as
the relationship between two or more things. In financial analysis a ratio is
used as a benchmark for evaluating the financial position and performance
of a firm. The relationship between two accounting figures, expressed
mathematically, is known as a financial ratio.

TYPES OF RATIOS
Several ratios; calculated from the accounting data, can be grouped
into various classes according to financial activity or function to be
evaluated. We may classify the ratios into the following categories.

Liquidity ratios
Leverage ratios

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 Profitability ratios
Capital Structure Ratio
Other Ratio

LIQUIDITY RATIO

It is extremely essential for a firm to be able to meet its obligations as

they become due. Liquidity ratios measure the ability of the firm to meet its
current obligations. In fact, analyses of liquidity needs the preparation of
cash budgets and cash and fund flow statements but liquidity ratios by
establishing a relationship between cash and other current assets to current
obligations, provide a quick current assets to current obligations, provide a
quick measure of liquidity. A firm should ensure that it should not suffer
from lack of liquidity, and also that it does not have excess liquidity. The
failure of company to meet its current obligation due to lack of sufficient
liquidity, will result in poor credit worthless, loss of creditors confidence for
even in legal tangles resulting in the closure of the company. A very high
degree of liquidity is also bed. the firms fund will be unnecessarily tied up in
current assets therefore, it is necessary to strike a proper balance between
high liquidity and lack of liquidity.

The most common ratios, which indicate the extent of liquidity, are

Current ratio
Quick ratio

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CURRENT RATIO

Current ratio is the ratio of total current assets to total current

liabilities. Current assets of a firm represent those assets which can be in
ordinary course of business converted into cash with in short period of time
and current liabilities defined as liabilities which are short term
manufacturing obligation to meet current assets.
To measure the financial liquidity of Amul
Current assets = Stock, Advance & debtors, Cash & Bank Balance.
Current liabilities = Deposits, Due to societies, O/s against Expenses and
Purchases, Sundry Creditors, Provisions.

Current assets
Current Ratio = ________________

Current liabilities

YEAR CURRENT CURRENT RATIO

ASSETS LIABILITY (C.A/C.L)
2003-04 16102.2 6786 2.37
2004-05 18596.49 8988.56 2.07
2005-06 18990.94 9460.79 2.12
2006-07 19874.21 12106.54 1.64
2007-08 28995.9 13892.41 2.09
2008-09 28874.39 17801.69 1.62

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INTERPRETATION
The ideal Current Ratio of any firm is 2:1. In AMUL first three year the ratio
is more than 2, it indicates good financial ability of the sector. But after that
the ratio is declining because of the increase in Current Liability. It indicates
that day by day the amounts of creditors are increasing which is not good for
the sector.

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QUICK RATIO
Quick ratio is also called acid test ratio. It is the ratio between quick
current assets and current liabilities. It is calculated by dividing the quick
assets by current claim. Quick ratio is the measurement of firms ability to
convert its current assets quickly into cash in order to meet its current claim.
The term quick assets refers to current assets which can be converted
into cash immediately or at a short notice without reduction in value of
quick ratio.
Quick Assets = Stock, due from societies, Advances, trade and Sundry
Debtors Cash and Bank Balance

Quick assets
Quick Ratio = ______________
Current liabilities

YEAR QUICK CURRENT RATIO

ASSETS LIABILITY (Q.A/C.L)
2003-04 11365.37 6786 1.67
2004-05 10686.31 8988.56 1.19
2005-06 9078.21 9460.79 0.96
2006-07 10533.65 12106.54 0.87
2007-08 13258.02 13892.41 0.95
2008-09 9433.42 17801.69 0.53

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INTERPRETATION
The ideal Quick Ratio is 1:1. In AMUL the Quick Ratio is more than 1 in
2003-04 and 2004-05. But than after it started declining and reached below 1
for the next four years. The reason is continuous increase in the current
liability.

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LEVERAGE RATIO

In the short term creditors like bankers and suppliers of raw material;
are more concerned with firms current debt-paying ability, on the other
hand, long-term creditors like debenture holders, financial institution are
more concerned with the firms long term financial strength In fact a firm
should have short as well as long term financial position. To judge the long-
term financial position of the firms financial leverage or capital structure
ratios are calculated. These ratios indicate funds provided by owners and
lenders. As a general rule, there should be an appropriate mix of debt and
owners equity in financing the firms assets.

STOCK TURNOVER RATIO

This ratio indicates the efficiency of the firm in selling its product. It
is calculated by dividing the cost of good sold by average inventory.
Average Stock
Inventory turnover = ___________________ 300
Cost of Goods Sold

Cost of good sold = Opening stock + Purchase of Milk + Purchase

of Raw Material + Purchase expenses Closing
stock

Opening Stock + Closing Stock

Average Inventory = ____________________________

16
 2

YEAR AVGERAGE COST OF RATIO

STOCK GOODS SOLD (A.S./C.O.G.S)*300
2003-04 4493.49 43660.28 31 days
2004-05 4900.41 47221.13 31 days
2005-06 7199 56259.48 38 days
2006-07 7471.21 65762.20 34 days
2007-08 10214.83 88181.97 35 days
2008-09

INTERPRETATION
From the above ratio we can say that AMUL is turning its inventory of
finished good into sales in 31 days in 2003-04 and 2004-05, 38 days in
2005-06, 34 days and 35 days in 2006-07 and 2007-08 respectively. It is
good for any co-operative sector.

17
DEBTORS TURNOVER RATIO

A firm sells goods for cash and credit is used as a marketing tool by a
number of companies. When the firm extends credit to its customer. Book
debts (debtors or receivables) are created in the firms accounts. Book debts
are expected to be converting into cash over a short period and, therefore are
included in current assets. The liquidity position of the firm depends on the
quality of debtors to a great extent. Financial analyses apply three ratios to
judge the quality or liquidity debtors: (a) debtor turnover (b) Collection
period and (c) again schedule of debtors.
Debtors turnover Ratio can be found out dividing Average Debtors by Sales

Sales = Net Sales of Milk and Milk products

Debtors = Trade Debtors, Sundry debtors,

Debtors
Debtors Turnover Ratio = ________ 300
Sales

YEAR AVGERAGE SALES RATIO

DEBTORS (A.D./SALES)*300
2003-04 6690.15 54088.29 37 days
2004-05 6797.52 59459.07 34 days
2005-06 7679.62 70206.23 33 days
2006-07 6759.25 81631.69 25 days
2007-08 7625.77 107187.29 21 days
2008-09 137212.35

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INTERPRETATION
From the above ratios we can say that AMULS Debtors remain outstanding
for 37 days in 2003-04, 34 days in 2004-05, 33 days, 25 days, 21 days in
2005-06, 2006-07 and 2007-08 respectively. The Collection period of
Debtors is decreasing day by day. It is good sign for AMUL.

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CREDITOR TURNOVER RATIO

Creditor turnover ratio is computed by net credit purchases to average

creditors.
Creditors = Outstanding against Purchases + Societies + Outstanding against
Expenses + Sundry Creditors

Creditor Turnover Ratio = _ Average Creditors 300

Net Purchase

YEAR AVGERAGE NET RATIO

CREDITORS PURCHASE (A.C. /N.P.)*300
2003-04 5930.37 41188.59 43 days
2004-05 7098.06 49931.03 43 days
2005-06 8095.97 57374.94 42 days
2006-07 9798.1 64034.16 46 days
2007-08 12312.25 93690.87 39 days
2008-09

20
INTERPRETATION
From the above we can say that the payment of Creditors is outstanding by
AMUL. 43 days in 2003-04 and 2004-05, 42 days, 46 days, 39 days in 2005-
06, 2006-07 and 2007-08 respectively. The payment period to Creditor
remain same in every year. It is good for AMUL.

21
FIXED ASSETS TURNOVER RATIO
Firm may wish to know its efficiency of utilizing fixed assets
separately for AMUL the fixed assets turnover ratio is
Sales
Fixed Assets Turnover = __________________

Net Fixed Assets

YEAR SALES NET FIXED RATIO

ASSETS (Sales/N.F.A)
2003-04 54088.29 9588.26 5.64
2004-05 59459.07 6107.85 9.73
2005-06 70206.23 4968.66 14.13
2006-07 81631.69 5371.69 15.20
2007-08 107187.29 6122.97 17.51
2008-09 137212.35

INTERPRETATION
From the above ratio we can say that in AMUL Fixed Assets is recovered in
5.64 times in 2003-04, 9.73 times in 2004-05, 14.13 times, 15.2 times, 17.51
times in 2005-06, 2006-07 and 2007-08 respectively. We can say that the
total Fixed Assets Turnover is increasing day by day. It is good sign for
AMUL.

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WORKING CAPITAL TURNOVER RATIO

A firm may also like to relate net working capital to sales. It may thus
computer net working capital turnover by dividing sales by net working
capital turnover for Amul the ratio is

Sales
Net Current assets Turnover = _______________

Working Capital

YEAR SALES WORKING RATIO

CAPITAL (Sales/W.C.)
2003-04 54088.29 9320.2 5.80
2004-05 59459.07 9607.93 6.18
2005-06 70206.23 9530.15 7.37
2006-07 81631.69 7767.67 10.51
2007-08 107187.29 5033.89 21.42
2008-09 137212.35

23
INTERPRETATION
From the above we can say that AMUL is able to recover its Working
Capital 5.8 times in 2003-04, 6.18 times in 2004-05, 7.37 times in 2005-06,
10.51 times 2006-07 and 21.42 times in 2007-08. Working Capital Turnover
is also increasing day by day. It is good and from it AMUL can generate
more and more sales.

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TOTAL ASSETS TURNOVER RATIO

Total Assets Turnover Ratio shows the firms ability in generating sales
from all financial sources committed to total assets thus
Sales
Total Assets Turnover = _____________
Total Assets

Total assets (TA) include Net fixed assets (NFA) and Current Assets (CA)
for Amul the ratio is

YEAR SALES TOTAL RATIO

ASSETS (Sales/T.A.)
2003-04 54088.29 26326.08 2.05
2004-05 59459.07 25277.94 2.35
2005-06 70206.23 24595.17 2.85
2006-07 81631.69 25761.82 3.17
2007-08 107187.29 35864.51 2.99
2008-09 137212.35

25
INTERPRETATION
From the above data we can say that in AMUL Total Asset Turnover is
recovered 2.05 times in 2003-04, 2.35 times in 2004-05, 2.85 times, 3.17
times, 2.99 times in 2005-06, 2006-07 and 2007-08 respectively. Till 2007-
08 the Total Asset Turnover Ratio is increasing because the total asset is
quiet same in every year. But in 2007-08 the Total Assets is increasing by
40% from 2006-07. So the turnover ratio is declining in that year.

26
NET ASSETS TURNOVERS

The firm can compute net assets turnover simply by dividing sales by
net assets (NA) net assets turnover may also called capital employed
turnover for Amul the ratio is

Net Assets = Net Fixed Asset + Current Asset after deducting Current
Liability

Net assets turnover = Sales

Net Assets

YEAR SALES NET RATIO

ASSETS (Sales/N.A.)
2003-04 54088.29 18908.46 2.86
2004-05 59459.07 9607.93 6.18
2005-06 70206.23 14498.81 4.84
2006-07 81631.69 13139.36 6.21
2007-08 107187.29 11126.86 9.63

27
INTERPRETATION
From the above data we can say that Assets Turnover in AMUL during
2003-04 is 2.86 times, 6.15 times in 2004-05, 4.84 in 2005-06, 6.21 times in
2006-07 and 9.63 times in 2007-08 respectively. The Net Asset Turnover is
increasing day by day. But the total Current Liability is also increasing and it
is directly affected to Net Asset Turnover. If the Current Liability is
decreased than the Net Asset can be Turnover by more than this ratio.

28
PROFITABILITY RATIOS
A company should earn profit to survive and grow over a long period
of time. Profit are essential but it would be wrong to assume that every
action initiated by management of a company should be aimed at
maximizing profits irrespective of social consequences and profit is looked
upon as a term of above since some firms always want to maximize profits
at due cost of employees, customers, and society. Except such infrequent
cases, it is fact profit must be earned to sustain the operation of the business
to be able to obtain funds from investor for expansion and growth and to
contribute towards the social overhead for the welfare of society.
Profit is the difference between revenues and expenses over a period
of time. Profit is the ultimate output of the company; and it will have no
future if it fails to make sufficient profits. There fore financial manager
should continuously evaluate the efficiency of its company in term of
profits.
Generally two types of profitability ratios are calculated.
Profitability in relation to sales
Profitability in relation to investment

Measures of Profit
Profit can be measured in various ways
1) Gross Profit
(2) Net Profit

29
GROSS PROFIT TO SALES RATIO
Gross profit ratio is calculated by dividing Gross Profit by sales. Here
gross profit is the different between sales and the manufacturing cost of
good sold.

Sales Cost of Good sold

Gross profit margin = ______________________ 100
Sales

YEAR GROSS SALES RATIO

PROFIT (G.P./Sales)*100
2003-04 10428.01 54088.29 19.27
2004-05 12235.94 59459.07 20.58
2005-06 13946.75 70206.23 19.87
2006-07 15869.49 81631.69 19.44
2007-08 19005.32 107187.29 17.73
2008-09 137212.35

INTERPRETATION
From the above ratio we can say that Gross Profit Ratio in 2003-04 is
19.27%, 20.58% in 2004-05 20.58%, 19.87% in 2005-06, 19.44% in 2006-
07 and 17.73% in 2007-08 respectively. The total amount of Gross Profit is
increasing every year. But the ratio is decreasing; the main reason is increase
in the Purchase Price Milk and Raw Material.

30
NET PROFIT RATIO
Net Profit is obtained when operating expenses; interest and taxes are
subtracted from gross-profit. The net profit margin ratio is measured by
dividing profit after tax by sales.
Net profit
Net profit margin = __________ 100

Sales

YEAR NET SALES RATIO

PROFIT (N.P./Sales)
2003-04 252.46 54088.29 0.46
2004-05 311.23 59459.07 0.52
2005-06 323.74 70206.23 0.46
2006-07 411.50 81631.69 0.50
2007-08 451.51 107187.29 0.42
2008-09 575.53 137212.35 0.42

INTERPRETATION
From the above figure we can say that the percentage of Net Profit is 0.46%
in 2003-04 and 2005-06. In 2004-05 it is 0.52%, 0.50% in 2006-07 and
0.42% in 2007-08 respectively. The total amount of sales is increased every
year but at the other side total operating expenses is also increased day by
day. So it directly affect to Net Profit Ratio of AMUL.
OPERATING EXPENSES RATIO

31
 Operating Expenses ratio is found out by dividing operating cost by
sales.
Operating Cost = Total Cost Interest Provision Closing Stock

Operating Cost
Operating Cost Ratio = __________ 100

Sales

YEAR OPERATING SALES RATIO

COST (O.C./Sales)
2003-04 53422.7 54088.29 98
2004-05 58785.45 59459.07 98
2005-06 69636.1 70206.23 99
2006-07 80627.15 81631.69 98
2007-08 106956.62 107187.29 99
2008-09 137212.35

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INTERPRETATION
From the above data we can say that Operating Expense remains same
during the 2003-04, 2004-05, 2006-07 i.e.98 %. In 2005-06 and 2007-08 it
was 99%. The Operating Expenses of AMUL is increasing out of 1 Rs of
sales 98 and 99 paisa is consumed in operating Expenses. The main reason is
increase in Marketing, Packaging, and Processing Expenses and the price of
Raw Material and Milk.

RETURN ON CAPITAL EMPLOYEED

33
Return on Capital Employed Ratio is found out by dividing Net Profit by
Capital Employed
Capital Employed = Total Assets Misc. Expenses Current Liability

Net profit
Return on Capital Employed = __________ 100

Capital Employed

YEAR NET CAPITAL RATIO

PROFIT EMPLOYED (N.P./C.E.)
2003-04 252.46 19540.09 1.29
2004-05 311.23 16289.38 1.91
2005-06 323.74 15063.48 2.15
2006-07 411.50 13572.19 3.03
2007-08 451.51 11767.44 3.84
2008-09 575.53

34
INTERPRETATION
From the above data we can say that Return on Capital Employed during
2003-04 is 1.29%. It was 1.91% in 2004-05, 2.15% in 2005-06, 3.03% in
2006-07 and 3.84% in 2007-08 respectively. Return on Capital Employed is
increasing day by day. The recover Ratio of Capital Employed in the
business is increasing it is good sign for AMUL.

RETURN ON SHAREHOLDER FUND

35
Return on Shareholder Fund Ratio is found out by dividing Net Profit by
Shareholders Fund.
Shareholders Fund = Equity Share Capital + Reserve and Surplus
Misc. Expenses

Net profit
Return on Shareholders Fund = __________ 100

Shareholders Fund

YEAR NET PROFIT SHAREHOLDER RATIO

S (N.P. /S.F.)
FUND
2003-04 252.46 3201.91 7.88
2004-05 311.23 3452.65 9.01
2005-06 323.74 3683.51 8.78
2006-07 411.50 4138.50 9.94
2007-08 451.51 4486.30 10.06
2008-09 575.53

INTERPRETATION

36
From the above ratio we can say that the Return on Shareholder Fund is
7.88% in 2003-04, 9.01% in 2004-05, 8.78% in 2005-06, 9.94% in 2006-07,
and 10.06% in 2007-08 respectively. The Return on Shareholders Fund is
increasing every year. So it is good sign that the recover ratio of amount
invested is increasing.

EARNING PER SHARE

37
 The profitability of the common shareholders investment can
also be measured in many other ways on such measure is to
calculate the earning per share. The earning per share is calculated
by dividing the profit after taxes by the total number of common
(ordinary) shares outstanding.
EPS calculation made over years indicate whether or net the
firms earning power on per-share basis has changed over that
period. Earning per share of the company should be compared with
the industry average and the earning per share of other firms.
Earning per share simply shows the profitability of the firm on per
share basis.

Net Profit
Earning per share = __________________________________
Number of common shares outstanding

YEAR NET PROFIT NO. OF RATIO

SHARES O/S (N.P. /Share)
2003-04 252.46 12.13 20.81
2004-05 311.23 13.95 22.31
2005-06 323.74 15.97 20.25
2006-07 411.50 19.80 20.78
2007-08 451.51 22.29 20.26
2008-09 575.53

38
INTERPRETATION
From the above data we can say that Earning per Share is 20.81Rs in 2003-
04, 22.31 Rs in 2004-05, 20.25 Rs in 2005-06, 20.78 Rs in 2006-07 and
20.26 Rs in 2007-08. Earning per Share ratio is comparatively better for
AMUL. The shares of AMUL are distributed only to the Societies, so the
main earning is distributed to its Societies.

DIVIDEND PAYOUT RATIO

39
 Dividend payout ratio is known as a payout ratio. It measures the
relationship between the earning belonging to the ordinary shareholders and
the dividend paid to them. In other words, the D/P ratio shows what
percentage share the net profit after taxes and preference dividend is paid out
as a dividend to the equity holders. It can be calculated by dividing the total
dividend paid to owners by the total profits/earnings available to them.
Alternatively it can be found out by dividing the DPS by the EPS.
The rate of dividend per ordinary share = 15 %

Amt. provided for Dividend

(1) Dividend = ________________ 100
Earning per share

Dividend per share

(1) Dividend payout ratio = ________________ 100
Earning per share

40
 YEAR DIVIDENED EARNING PER RATIO
SHARE (Div./E.P.S)
2003-04 14.53 20.81 69.82
2004-05 14.53 22.31 64.95
2005-06 14.60 20.25 72.10
2006-07 14.50 20.78 69.78
2007-08 14.60 20.26 72.06
2008-09

INTERPRETATION
From the above ratio we can say that Dividend Pay Out Ratio is 69.82% in
2003-04, 64.95% in 2004-05, 72.10% in 2005-06, 69.78% in 2006-07 and
72.06 in 2007-08. From the Total Earning per Share averagely 70% amount
is distributed to the Shareholders.

41
CAPITAL STRUCTURE RATIO
In this type of Ratio the comparison made for Capital Structure. In
this Ratio the proportion is to be found out between different types of long
term capital.
In this type of ratios we can find out following type of ratios
Debt Equity Ratio
Proprietary Ratio

DEBT EQUITY RATIO

Debt-Equity Ratio Compute by dividing Total Debt to Net Worth.
Total Debt = Debentures + Deposits + Long Term Loans
Net Worth = Equity Share Capital + Reserve & Surplus

Total Debt
Debt-Equity Ratio = ____________
Net Worth

YEAR TOTAL DEBT NET WORTH RATIO

(T.D./N.W)
2003-04 10840.16 3201.91 3.38
2004-05 10363.16 3452.65 3.00
2005-06 9216.63 3754.41 2.45
2006-07 7363.71 4221.59 1.74
2007-08 5874.95 4591.36 1.28
2008-09

42
INTERPRETATION
From the above ratio it is clear that Debt-Equity Ratio in 2003-04 is 3.38
times. It was 3.0 times in 2004-05, 2.45 times in 2005-06, 1.74 times in
2006-07 and 1.28 times in 2007-08. The ideal Debt-Equity Ratio is 2:1, in
AMUL 2003-04, 2004-05 and 2005-06 the Ratio is more than 2, because of
the higher amount of Long Term Debt but than after it is declining, so it
shows that Total Long Term Debt is decreasing. It is good sign for AMUL.

PROPRIETARY RATIO

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 Proprietary Ratio is found out by dividing Proprietary Fund by Total
Assets.
Proprietary Fund = Equity Share Capital + Reserve and Surplus

Proprietary fund
Proprietary Ratio = ____________
Total Assets
YEAR PROPRIETARY TOTAL RATIO
FUND ASSETS (Sales/T.A.)
2003-04 3201.01 26326.08 12.16
2004-05 3452.65 25277.94 13.66
2005-06 3754.41 24595.17 15.26
2006-07 4221.59 25761.82 16.39
2007-08 4591.36 35864.51 12.80
2008-09

INTERPRETATION
From the above ratio it is clear that Proprietary Ratio for the year 2003-04 is
12.16%. In 2004-05 it is 13.66%, in 2005-06 it is 15.26%, in 2006-07 it is
16.39% and in 2007-08 it is 12.8%. Out of total Assets the above percentage
is invested by Proprietor and it is not better but we can say it is good for any
Co-Operative Society.
OTHER RATIOS

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In this Ratio we find following types of Ratio
Debt Ratio
Debtors Asset Ratio

DEBT RATIO:
This Ratio can be found out by dividing Total Debt by Net Asset.
Debt = Loans + Debentures + Fixed Deposit
Net Asset = Total Assets Current Liability

Total Debt
Debt Ratio = ____________ 100

Net Assets

YEAR TOTAL NET RATIO

DEBT ASSETS (Debt./N.A.*100)
2003-04 10840.16 19540.09 55.48
2004-05 11363.16 16289.38 69.75
2005-06 9716.63 15063.48 64.50
2006-07 7363.71 13572.19 54.25
2007-08 15374.95 107187.29 70.32
2008-09 137212.35

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INTERPRETATION
From the above ratio we can say that Debt Ratio in 2003-04 is 55.48%. It
was 69.75% in 2004-05, 64.5% in 2005-06, 54.25% in 2006-07 and
130.65% in 2007-08. It is comparatively good, except 2007-08.

TOTAL LIABILITY TO ASSET RATIO

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 This Ratio can be found out by dividing Total Liability by Total Asset
Total Liability = Debentures + Loans + Fixed Deposit + Current Liability

Total Liability
Total Liability to Total Assets Ratio = ____________ 100

Total Assets
YEAR TOTAL TOTAL RATIO
LIABILITY ASSETS (Sales/T.A.)
2003-04 17618.62 26326.08 67.00
2004-05 19296.36 25277.94 76.00
2005-06 18608.22 24595.17 76.00
2006-07 18796.43 25761.82 73.00
2007-08 28947.46 35864.51 81.00
2008-09

INTERPRETATION
From the above ratio we can say that Total Liability to Total Asset Ratio in
2003-04 is 67%. In 2004-05 and 2005-06 it is 76%, in 2006-07 it is 73% and
in 2007-08 it is 81%. From the above ratio we interpret that in compare of
Total Assets. The percentage of Total Liability is comparatively less so it
indicate good sign for AMUL.
CHALLENGES TO BE MET

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 Expansion upgrading of plant and equipment to met increasing
demanded for quality and quantity with the help of better-qualified
personnel.
Rapid increase in productivity while respecting the basic man land
animal dynamic that is control to dairy and agriculture development in
India
Development of new markets and expansion of old ones replacing
additional system with quality packaged milk products and vegetable.
Creating a national information network to ensure that accurate timely
information is available to all who need it.
Rapid progress towards the highest qualify standard strengthens
institutions leaders, managers and members.

CONCLUSION

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Amul is a highly successful co-operative sector in world. Which truly work
for farmers, who are the members of union all departments are working well
and help the union to reach toward top position. I have list out some
recommendations they are follow.

Amul has competitive established system. The four hands of Amul are
working successfully with corporation. The people of Amul are very co-
operative and enthusiastic. Amul is famous as Anand pattern for its co-
operative organization in world. So its a matter proud for people of Anand
as well as India. Amul is really The Taste of India.

By this summer internship report anybody can get the overview of the
condition of the financial statement and the organizations past and present
situation. The ratio analysis shows the direction of the organizations growth.

According to my point, success factor being Amul are hard work discipline,
co-operative structure, production technology development, and the proper
method for paying the debt and collecting the payment. The main cost for
AMUL is transportation cost for collecting the milk from different villages.
But now AMUL have the chilling facilities to some big villages (milk
collection centre). So that the milk is stored up to 2-3 days. Then AMUL
collect the milk from there after 3 days.

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 BIBLIOGRAPHY

(1) Companys Annual Reports (last 6 years)

(2) www.Google.com

(3) www.Amuldairy.com

(4) Prasanna Chandra, Financial Management Fourth Edition

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